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London court orders KCM to pay U&M US $90 million for breach of contract

Economy London court orders KCM to pay U&M US $90 million for breach...

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Konkola Copper Mines has been ordered to pay U&M Mining Zambia a sum of US$ 90 million by the London International Court of Arbitration for breach of contract.
U&M had dragged KCM to the London International Court of Arbitration for prematurely terminating the contract which resulted in heavy losses.
U&M started the London International Court of Arbitration proceedings and KCM obtained an ex parte interim injunction in the Ndola High Court compelling U&M to vacate the mine immediately.

U&M subsequently obtained an ex parte anti-suit injunction from the English Court preventing Konkola from taking steps in the Zambian proceedings on the grounds that it was in breach of the arbitration agreement which required London International Court of Arbitration.

The English Court was asked to decide whether the seat of the arbitration commenced by U&M was England and if so, whether the English Court had exclusive jurisdiction to grant interim relief in support of the arbitration.

The Judge found that the seat of arbitration was London, notwithstanding Konkola’s submissions that the seat was Zambia because of the close connection of the parties, their contracts and their dispute to Zambia.

The Judge found that there was no clear evidence to indicate that the parties agreed to choose a seat other than the place of the arbitration, and thus held that the general principle that the seat is “in most cases sufficiently indicated by the country chosen as a place of arbitration” should be followed.

The Court ruled that whether Konkola was nevertheless entitled to apply to a foreign court to obtain interim relief in (Konkola submitted) support of arbitration.
The Judge held that, on the facts, the answer lay in the contractual arrangement between the parties and decided the question on the basis of interpretation of the contracts and London International Court of Arbitration rules.

The Judge found Econet Wireless Ltd Vs Vee Networks Ltd to be the most relevant authority on the point which found that the natural court for the granting of interim injunctive relief will normally be the court of the country of the seat of the arbitration.

The Judge added that where the seat of the arbitration is abroad, the English Court will need a very good reason to exercise its jurisdiction to grant interim relief in support of the foreign arbitration.

The Judge added that to say ‘a party may exceptionally be entitled to seek interim relief in some court other than that of the seat, if for practical reasons the application can only sensibly be made there, provided the proceedings are not a disguised attempt to outflank the arbitration agreement.
A KCM Spokesperson confirmed the ruling but refused to comment further on the matter.


    • Let me get this right. It looks to me that U&M could not get a favorable judgement in Ndola, Zambia and had to go to London to get a fair judgement. What does this say about our judiciary? Could it be that KCM had bought the Zambian Judges and this is why they were fighting for the “seat” to be in Zambia. There is a lot of mystery around these mining companies in Zambia. All of them need to be looked at carefully. Get this from a former ZCCM Mining Engineer.

    • Contracts are drawn such that the seat of arbitration is agreed upon in the contract, by both parties, in case mis-understanding or alleged breach of contract is assumed by one party, which party then decides to take the case for arbitration. KCM knew they were on the losing side and probably wanted to hold the arbitraion within the Zambian system, where they might find someone to buy, probably.

  1. KCM at it again….a company that has been stealing from poor Zambia. A company that rejoice in the sufferings of poor miners….shame on them.

    Peace and Prosperity to Mother Zambia.

  2. What is the Government of Zambia waiting for? Until every kobo is siphoned out! Please act now and rescue the people of Chingola and Zambia from these Good for nothing Chaps.

  3. Chikwanda is still waiting for his chq before pouncing on them.

    What more with his nephew boss asking the KCM CEO to transfer a K200 000 into his Standard chartered bank account.

  4. In the frist place these guys lied that they were Vendetta mining when infact there is no relationship between Vendetta Mining corp and these crooks.

  5. These Indians have failed to run the mining conglomerate. Suppliers and others mining companies feeding them with concentrates must come on board and squeeze these chaps and make them leave. We require serious investors to move in and do straight business.

  6. Exploitation at the highest level. It is in the Marwari gene (the tribal group Anil Agarwal belongs to). The shylocks and pawn brokers in Mumbai and Kolkata are from this community. A world renowned mining conglomerate is being run with such business ethics. At one time, the Tailings Leach Plant (TLP) was at the technological forefront. Ever since copper solvent extraction was developed by the ICI laboratory in the UK, this complex has been setting world standards. The waste dumps surrounding Chingola can profitably sustain copper production, remember that the ore has been blasted and transported out of the pit, so it has inherent value added. Pres Sata…PLEASE, PLEASE ACT. I CAN SEE ASSETS BEING STRIPPED AND SOLD BEFORE VEDANTA’s EXIT!!!

  7. Hey friends, this is just the beginning of the awards from the International Court of Arbitration. Another 3 companies that were hounded from the property are well on the way to their day of returns. Zambian courts rule in favour of KCM every time – one does not have to wonder why ? Indians dont understand the word “consequences” and also dont pay regard to any sustainable healthy mining practise.

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